[Congressional Record (Bound Edition), Volume 152 (2006), Part 7]
[House]
[Page 8763]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       THE TRUTH ABOUT OIL PRICES

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Oregon (Mr. DeFazio) is recognized for 5 minutes.
  Mr. DeFAZIO. Mr. Speaker, well, we heard some interesting debate on 
the floor today. There are those who allege, well, if only, if only we 
opened up our most sensitive coastal areas, areas that are critical, 
for instance, for our fisheries, that we could drill our way out of 
this crisis. We could drill our way out of high prices for oil and gas.
  But as one gentleman from the Republican side pointed out, actually, 
that is far from the truth, because even if additional significant 
finds are made, they would be sold into a market which does not reflect 
the costs of the production of the oil or its origins. It is 
essentially a market controlled by OPEC, the cartel mostly based in the 
Middle East, that is violating international trade laws by colluding to 
restrict supply and drive up the price of crude oil. And the Bush 
administration, who are great fans of free trade, the World Trade 
Organization, and rules-based trade, refuses to file a complaint 
against OPEC. I guess they are scared of OPEC and their clout.
  But the point is, even if these finds were made, for instance, today 
it costs about 28 bucks on average for a barrel of Texas crude. But 
guess what? It sells for $70 a barrel.
  Now, where does that other $42 go, one wonders. Well, it goes, in 
good part, to speculators. It turns out that the trade in crude oil in 
the United States of America, only a quarter of that market is 
regulated and controlled by the government under the rules for 
commodities, Commodities Futures Trading Commission. The rest of it is 
traded off the books. There is a lot of self-dealing going on, trades 
that would be illegal. One dealer sits next to another dealer and says 
trade, $5. Trade you back, $5. Trade you back, $5; trade you back $5, 
and suddenly we have jacked up the price to $70 a barrel.
  Experts say that if we merely took the step, totally within the 
authority of this administration and the Congress to bring crude oil 
under the regulation of the Commodity Futures Trading Commission, we 
would see an immediate 20 to 25 percent drop. That is not free-market 
oil. And then, if we took on OPEC and filed trade complaints against 
OPEC, we could further drive down the price.
  Yes, there is a long-term problem with the availability of oil. Yes, 
we need to wean ourselves and become more energy efficient. But in the 
short-term, we don't need to allow the American consumers to be price 
gouged by the likes of ExxonMobil. Oh, they are not price gouging. They 
only made $100 million a day last year. And they handed their retiring 
CEO a $400 million pension. That is 4 days of gouging at the pump for 
ExxonMobil. That was no big skin off their backs. $400 million 
extracted from American consumers unfairly. Price gouging.
  So if we were to regulate the markets and, secondarily, tax the 
windfall profits. Now some say, oh, we tried that in the Carter 
administration. It won't work. No, we say, okay, we are going to tax 
your windfall profits unless you invest that money in new refinery 
capacity, unless you invest that in new production. Unless you invest 
it in alternate fuels, we will tax the heck out of it. We are not going 
to allow you to give 400 million bucks to your retiring CEO or the next 
retiring CEO. We are not going to allow you to price gouge consumers 
and buy back your stock to drive up the value of the stock options of 
all the people sitting on the board of directors. But if you put it to 
productive uses, then it won't be taxed away from you. So we could take 
those two steps and provide some immediate price relief to the American 
people.
  And then we need to begin investing in alternate fuels. You know, it 
would be nice if instead of buying our oil from the Mid East and that 
incredibly volatile region, supporting many countries who are, you 
know, working with the terrorists against the United States of America 
with our dollars, if we became energy efficient like Brazil did. They 
had a vision 30 years ago. They decided they were not going to import 
oil anymore. It took them 30 years. Tell me we can't do that in the 
United States of America; that we can't move it toward biofuels and 
alternative fuels and more efficient and alternative technology.
  Now, the President has talked about it, which is nice. It is a 
change. It is a big change. He is talking about it. But his budget 
doesn't contain any money to get us there. If you invested the same 
amount of money into energy independence and efficiency that the 
President has proposed, if JFK had invested the same amount in getting 
us to the Moon, we wouldn't have gotten to the Moon yet. So he isn't 
following up on his rhetoric; might have something to do with his 
history with the oil industry and Dick Cheney's history with the oil 
industry and every other member of the administration's history with 
the oil industry.
  We can become energy independent and efficient and have a greater 
future for the American people.

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